In most cases swing prices for today’s flow were up moderately from end-of-May levels but both above and below June indexes depending on the market. A majority of points appeared to be starting out below index.
Although the latest six-to-10-day forecast from the National Weather Service indicates a strong possibility of increased air conditioning load that could generate a price rally next week, the current weakness of weather fundamentals in most areas along with the usual weekend slump in demand had several sources expecting softness today.
“Here we are on the verge of June and still haven’t had much that feels like summer here,” said a Northeast utility staffer. It’s been a relatively cool spring for the South also, but more seasonable weather may be on the way as NWS predicts above normal temperatures next week for much of the nation’s midsection and most of the Southeast.
Weather extremes haven’t ended yet. While snow fell overnight Wednesday and early Thursday morning in the upper elevations of Vermont, a heat wave continued to build in California and the desert Southwest. San Francisco broke a May temperature record Wednesday with a downtown reading of 101 degrees, which certainly would astound anyone who has ever been in the city during late May or June before. San Francisco was only expected to get into the 90s Thursday, but that would still be hotter than normal.
As might be expected, the heat strained California’s power grid to the extent that Cal-ISO declared a Stage Two Electrical Emergency and indicated that rolling blackouts might become necessary Thursday afternoon. However, a combination of conservation efforts and securing some unexpected power supplies averted the necessity of blackouts, an ISO spokeswoman said.
SoCalGas took the unusual step of declaring an Overnominations Day event for today due to high linepack, which depressed border pricing. The OFO forced shippers without firm storage injection rights to find another home for their gas if possible, either selling to those who were willing to burn the gas or those with firm injection rights, a marketer said. The cause of the OFO was pretty straightforward, he continued. Swing prices for the first are well below bidweek numbers, he said, and with the threat of hot temperatures next week, traders were looking to pack the LDC’s system for the weekend.
An indicator that air conditioning load is starting to pick up in the South was Florida Gas Transmission’s warning Thursday of a potential Overage Alert Day notice due to “significant demand” in its market area.
The Atlantic hurricane season begins today, but no storm activity was in sight Thursday.
Bidweek ended quietly. The surge that Wednesday afternoon’s screen run-up gave June prices was fading a bit Thursday, said a western trader, but the impact was minimal because very little June business remained to be completed.
Â©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |